1. Field of Invention
The present application relates to the production and distribution of audio-visual content such as, for example, a television program, and more particularly, to a system and process for producing and distributing such audio-visual content to consumers, as well as evaluating the performance of and financing the production of the content.
2. Related Art
Modern television programs are typically developed by independent television production companies (studios) or by television broadcast networks themselves. Developing a new television series, however, is an increasingly expensive and risky endeavor under the traditional television series business model, particularly for the studios. Given the large upfront costs borne by the studio, even programs that ultimately prove successful from a ratings standpoint often do not begin to yield profit for the studio until around the fifth year of distribution when the program series is finally eligible for syndication. In contrast, networks typically take on comparatively little risk on the front end of the development process and are often able to cut their losses early by cancelling a show should it fail to garner sufficient ratings in a given time slot.
According to the traditional television series business model, writers and/or creators (“executive producers”) generate ideas for new television programs and then attempt to sell or pitch the basic premise to a network. For example, each summer from May to September, the major American broadcast television networks—including ABC, CBS, The CW, FOX, and NBC—receive hundreds of pitches for new shows from writers and producers. Later that fall, each network may typically request a number of scripts (e.g., about 60-70) for review based on the pitches. Then, the following January, each network typically “greenlights” (i.e., orders or authorizes) production of a limited number of “pilot” episodes based on the selected scripts. Shortly thereafter, the studios cast actors and assemble production crews to produce the pilots during so-called “pilot season.” A TV pilot is a key, early step in the development of a television series, often produced at considerable expense to the studios even though there is typically no guarantee that the pilot or any resulting series will ever be aired. The pilot itself may or may not air as part of the series. In the event that the pilot airs, it may typically go through re-shoots and editing before airing.
Once produced, pilots are presented to network executives and, in some cases, to test audiences. Based on feedback received during the pilot process, each network may choose several pilots for series status which are, in turn, typically presented in May at the networks' annual “upfronts” meeting, so named because of its main purpose: to allow marketers to buy television commercial airtime “up front”, i.e., several months before the fall network television season begins. Those programs chosen for series status are added to network schedules for the following season. The typical network television season runs from September to June and usually includes between 22-24 episodes of a given series. By contrast, the cable television season is typically shorter (e.g., over the winter or summer) and with fewer episodes such as, for example, 10-13 episodes. Networks typically order 13 initial episodes for the first season of a new series with an option for an additional number of episodes (e.g., 9 or 11) to complete the season. Thereafter, the network typically has an annual option to order another season (e.g., 22-24 episodes) on the same date every year.
There are customarily two types of options exercised by a network, the first being within (during) a season, and the second being for season to season. (A) Within a season, there may be different order patterns such as, for example, a network may order (i) six initial episodes, and before completion of principal photography of those episodes, the network would have the option to order seven additional episodes, or (ii) thirteen initial episodes, and before completion of principal photography of those episodes, the network would have the option to order an additional 9 episodes (commonly referred to as the “back 9”). The option is typically exercised during production in order to benefit from the continuation of production, which is costly to mount and coordinate. (B) For season to season, a network will typically have an option, usually within 2 to 12 months after delivery of the episodes of a season, to order additional seasons, in its sole discretion. Generally, a studio has no authority or basis to force the network to buy subsequent seasons.
The costs of production and proceeds from a television series are respectively borne and distributed depending upon who is “producing” the program. Often, a television studio may pay the costs of producing a program for a network, including the creative, writing and production staff, in return for receiving a license fee from the network for the right to air the show, along with a percentage of potential syndication proceeds in the future. The network then sells advertising spots during the television show with the expectation that advertising revenues will exceed the license fees and other network-related expenses. Unless negotiated otherwise, the network usually decides when to air the program and for how long the show will air. Thus, at any step, a show can be tossed out by a network with little or no recourse for the studio. For example, a network that orders a script hasn't committed to a pilot. Likewise, a network that orders a pilot hasn't committed to a series. In this regard, the traditional business model favors networks by providing a series of options: an option to receive a pitch, an option to receive a script, an option to greenlight production of a pilot, and an option to have a series produced by the studio. Subsequently, the network has the option of picking up additional episodes during airing of the initial series episodes and also typically has an annual option to continue the series for one or more new seasons.
Generally speaking, American television production companies have been willing to bear the front end costs and risk of producing a pilot and the first few years of a television series in the hopes that the series ultimately runs long enough to sell into syndication. Off-network syndication, more commonly known as “reruns,” typically involves the licensing of a program series that was originally run on network television. Studios rely on syndication to recoup production and other costs and generate profit and, therefore, naturally have a desire to expedite the path to syndication. At a minimum, enough episodes of the series must exist to allow for continual strip (daily) syndication over the course of several months without repeating episodes. Furthermore, the number of episodes available affects the overall price for syndication rights. For example, one hundred (100) episodes is a traditional threshold at which point a television series becomes viable for daily syndication—enough to fill a daily Monday-to-Friday schedule for 20 weeks without repeating an episode. Thus, syndication typically doesn't begin until after about the fourth season of a series. In some cases, however, for example in the context of children's programming, a 65-episode block is often sufficient since it allows for a 13-week cycle of daily showings with only four repeats per year (once per quarter). Syndication packages may contain some or all episodes from a series, and are usually licensed to as many television stations and markets as possible. Sitcoms and game shows have typically proven most successful in syndication because they are less serialized and can, therefore, be run non-sequentially without significantly impacting viewership.
Whether a network will continue to air a particular television program as well as the determination regarding how much advertising spots can be sold for is based on viewership, and more specifically ratings among particular demographics. There are known entities and metrics to assess a TV program's popularity and its viewing demographics. The market standard for audience measurement systems is the Nielsen Company's Nielsen ratings. Nielsen utilizes technology and viewer diaries to track viewing behavior down to the second, revealing detailed programming and commercial engagement. For TV, Nielsen ratings are coupled with detailed analysis of consumer viewing behavior and demographic information. The ratings allow networks to refine advertising campaigns based on demographics, day-part and audience composition. Such metrics are used to determine popularity of content in a set demographic and if content is successful a network drives certain advertisements to those demographics and also may assist a network in deciding whether to order more episodes.